George Osborne downplays Nick Clegg's 'rich tax' call


George Osborne: "I want the wealthy to pay more but I do not want to drive wealth creators away"

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Chancellor George Osborne has warned against "driving away" the UK's "wealth creators" after Deputy Prime Minister Nick Clegg called for a temporary additional tax on the rich.

Mr Clegg argued that those of "very considerable" means should pay more into the system, leading to an angry reaction from several Tory MPs.

He said this should come in addition to the Lib Dems' proposed "mansion tax".

But Mr Osborne said it was important not to deter business from the UK.

In recent weeks there have been several reported clashes between Liberal Democrats and Conservatives over issues including House of Lords reform, airport expansion and plans to redraw boundaries for House of Commons seats.

'National effort'

In an interview with the Guardian newspaper, Mr Clegg appeared to highlight differences over fiscal policy, by suggesting the government could go beyond his own Liberal Democrats' current policy for a "mansion tax" on properties of a high value.

He said: "In addition to our standing policy on things like the mansion tax, is there a time-limited contribution you can ask in some way or another from people of considerable wealth so they feel they are making a contribution to the national effort?" he said.

Mr Clegg said fairness was key to the next steps in tackling the "longer economic war".

"While I am proud of some of the things we have done as a government, I actually think we need to really hard-wire fairness into what we do in the next phases of fiscal restraint," he said.

"If we don't do that I don't think the process will be either socially or politically sustainable or acceptable."

The tax idea is expected to be debated at next month's Lib Dem conference in Brighton, with party sources suggesting Mr Clegg could eventually present it to the cabinet.

But, during a visit to Sunderland, Mr Osborne said: "I am clear that the wealthy should pay more, which is why in the recent budget I increased the tax on very expensive property transactions.

"But we also have to be careful as a country we don't drive away the wealth creators and the businesses that are going to lead our economic recovery."

For Labour, shadow Treasury minister Chris Leslie said: "Nick Clegg is once again taking the British people for fools. He talks about a tax on the wealthiest, but he voted for the tax cut for millionaires in George Osborne's Budget.

"And he has supported a failing economic plan which has pushed Britain into a double-dip recession and is leading to borrowing going up by a quarter so far this year."

Income tax graphic

Mr Clegg's comments provoked criticism from Conservative MPs.

Bernard Jenkin, who chairs the Commons Public Administration Committee, told the BBC: "If the politics of envy made a country rich, we would be a very rich country.

"I think most rich people are contributing far more in tax than other people.

"I know this is not a fashionable view, but if you go on raising tax on rich people - and that's why, in agreement with Nick Clegg we have had to cut the top rate of tax from 50p to 45p - you drive wealth abroad.

"This is a pre-conference, easy-clap line."

Fellow Conservative MP Mary Macleod said: "This is Nick Clegg saying let's try out a few ideas before party conference, probably will cheer up a few Lib Dems to talk about it. But it isn't government policy."

Discussions about tax and spending will take place before the chancellor's autumn statement.

In his interview, Mr Clegg also hinted at a return to cabinet for former Treasury minister David Laws.

Lib Dem Mr Laws resigned as chief secretary to the Treasury two years ago after admitting he claimed expenses to pay his partner rent.

"I have never made any secret of the fact that I want to see David Laws back in government," Mr Clegg said.

He also promised the coalition would stand by its commitment not to build a third runway at Heathrow, despite growing calls from Tory MPs for a change of heart.


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  • Comment number 691.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 690.

    Tax may be too high but worse is the incompetence of government. Far too much borrowing over the years and too many lies and deceit. The leaders need integrity and honesty.

  • rate this

    Comment number 689.

    Yeah everyone should pay the same rate of tax. It does not matter how much you earn, you are all paying you your Fair Share. Ripping rich people off is just as bad as making the poor pay the bulk. We do not yet live in a communist state...

  • rate this

    Comment number 688.

    What is actually meant is the poor need to pay more indirect tax. A one off tax or more tax for the rich means the rich will seek to make it up elsewhere. Either by avoidance in another area or make it up elsewhere. These products go up across the board and everyone including the poor pay more. Do you think the shareholders suffered with the one off tax on Oil or instead did oil go up in price.

  • rate this

    Comment number 687.

    Here's a radical idea! Why not just force them to pay the tax they owe anyway?

  • rate this

    Comment number 686.

    30,000 people recently applied for 1000 jobs at Land Rover. Locally a new Tesco opened and over 9000 people applied for 700 jobs. All these people are plainly work shy (not). Unless and until more jobs are created and with a growing population those in work will have to support those who cannot get work.
    Solution more jobs = more tax - Seemples!

  • rate this

    Comment number 685.

    650 Paul Stewart

    The rich are not rich because they earned it. They are rich because they stole it, and they can continue to steal because the law allows them to do so. Stealing is going on right now and in the depths of recession.

    I agree. Close the loopholes. But when the government is run by the thieves then who will want to do that? Not Cameron, George and chums

  • rate this

    Comment number 684.

    A flat tax is the only way to really tax the wealthy. Last year I earned 6 figure salary but had enough of being squeezed into paying more tax... So I changed my income structure, now I earn minimum wage but get dividends every month. It cost me about £1800 in accountancy fees but I pay 2k less tax a month . I.e. if the govenment didn't kill the golden goose I would be paying 24k more in tax.

  • rate this

    Comment number 683.

    When uni grants existed, a fellow student whose father's nett worth was several millions got a full grant. My dad on 30K at the time had to pay part of mine. Why? Good accountants. Close the loopholes, get all the unpaid taxes and then go back to the old tax system screwed up by Thatcher

  • rate this

    Comment number 682.

    That's fine, is he starting close to home or is it off shore?

  • rate this

    Comment number 681.

    Complicated. I think the most important part is moral duty, and if it can be demonstrated that they have a moral duty to pay more tax. And to be honest, without proper administration of the increased tax income no amount of money will make any difference.

    How abut the banker bonuses paid for by tax-payer bailouts go into the gov instead?

  • rate this

    Comment number 680.

    A mother see,s her offspring go off to a dodgy war,perhaps never to return, what price this, but the ultimate price for mother or child. Yet they give willingly or otherwise, their greatest assets. When rich men hide their ill gotten gains and cry they are being overly hurt by taxes, they should well remember the giving of others, the ultimate sacrifice, and it is not wealth in a monetary sense.

  • rate this

    Comment number 679.

    How about taxing Gold Coins, Antique clocks, and works of Art?

    All zero rated for Tax.

  • rate this

    Comment number 678.

    Justsense @ 38. I agree with you that they should be available to those who pay into the system and need support during financial difficulty however its the people that make it a lifestyle.
    People who are more than happy to live life on a shoe string, who have an "income" without working.
    Or even the young girls that get pregnant so that the government will provide them with housing.

  • rate this

    Comment number 677.

    Why now Clegg, whats your game?
    You've not said anything before so why start now? This is political postering - go back to sleep, no one believes what you say anymore!

    Just how long will it be before you change your mind?

    You didn't speak up when the rich got a tax cut, you know this government is flaky so why use a wooden spoon... your party is in deep trouble as it is and you don't help.

  • rate this

    Comment number 676.

    They should revisit the pasty situation (and perhaps include pot noodles too)

  • Comment number 675.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 674.

    Headline grabbing, ill thought through policies designed to be popular rather than effective – describes Nick Clegg to a tee doesn’t it? That’s what happened in the 2010 election, and this is what’s happening now…after all, its almost conference season and he needs to shore up his own vote. Self serving nonsense.

  • rate this

    Comment number 673.

    What a predictable mantra from Mr Clegg. I suppose he has to think of something to say. Give me a generation and i might be able to think of something that Nick has contributed to this government but i'm not optimistic.
    Shut up Nick for goodness sake. Leave it to the big boys.

  • rate this

    Comment number 672.

    We give away £10 billion a year to foreigners, some with their own space programmes, clearly we have no need whatever to take in more tax!

    You would be better taxing the causes of disproportionate income for nothing at source, like sports TV 'rights'. All music and film copyright (ab)use, money for nothing taxation.


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